COVID and Pipeline Incidents: Effects on Diesel Gas Prices
Gas prices have been on a rollercoaster ride since the beginning of time and throughout the years, many factors have affected the rise and fall of both regular and diesel gas prices. Specifically looking at diesel gas prices, we are analyzing factors such as COVID19 and other incidents which may have played a role in the increase or decrease of prices across the U.S. To see the effect these factors may have had, it’s important to look at diesel prices for past years as reported by the U.S. Energy Information Administration to determine changes.
The table below shows diesel gas prices across the US for 2019 for the last week of April and the first 3 weeks of May. As the weeks passed, diesel prices seemed to increase and decrease in small increments between $.02-$.06 in all areas except the West Coast showing some increases up to $.35.
Diesel prices experienced a significant drop in 2020 which may be attributed to COVID19 and its effects. The dates for this data included the weeks of April 27th-May 18th, 2020. All data during this time showed diesel gas prices to be significantly less than the previous year with continued decreases each week, increasing only a couple times at a max of $0.09. The U.S., along with the rest of the world, was going through the COVID19 pandemic and experiencing closures, unemployment, stay at home orders and more. Our analysis shows that COVID19 and its effects may have had a significant impact on the decrease of diesel gas prices. The less cars on the road, the less gas people buy.
The last table shows diesel gas prices for the last week of April 2021, and the past 2 weeks of May. The week of April 26th,2021 showed diesel gas prices at similar rates as 2019, even less in some areas such as the East Coast and the Rocky Mountain areas. Similar results were seen the following week. When the diesel gas price data was released on May 10th, 2021, it showed the biggest increase in gas prices across the entire U.S., during the time frames above, since 2019. Some areas experienced an increase between $0.40 and $0.47, with the Rocky Mountain area showing the greatest increase at $0.57. According to our analysis, this drastic increase in prices may have been due to a pipeline incident and its aftermath.
On May 7th, Colonial Pipeline, which transports nearly half of the East Coasts fuel supply through their pipelines, experienced a cybersecurity attack which was determined to involve ransomware. The company was forced to halt all pipeline operations affecting fuel distribution. The company announced on May 12th that they were able to get pipeline operations back online and have since been working on getting the fuel supply chain back to normal. The result of halting operations on the pipelines caused certain fuel shortages and may have contributed to an increase in gas prices.
Will the pipeline incident and COVID19 continue to effect diesel prices? If the trend continues to stray away from previous years, there may be more increases coming. Let's hope for decreases instead.